1st podcast of season 2 which tells a piece of history of the world’s leading manufacturer of mobile phones, Nokia, which was from 1998 to 2011.
It would take too long to tell the whole industrial history of this giant, so I focused on a period from 2007 to 2014 with the particularity of being a spectator and an actor with the thunderclap in 2013 for Nokia which is separated from its “mobile terminals” division, then in decline, which was then taken over by Microsoft. How is it possible ? How does a world leader with multiple R&D centers, patents, factories, talented managers bleak? Why has this giant declined in a few years? We will provide you with some answers to give you an idea of this period.
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To introduce you to this Finnish company, it can be recalled that in the 1990s Nokia was a company that made tires, cables, computers, televisions and 20% of the business was phones – they made the choice strategic to get rid of all its activities to refocus solely on mobile telephony in 1992. While it is the world leader, competition is fierce with many manufacturers such as RIM (which manufactures Blackberries), Motorola, Palm and soon a again came out of nowhere, at least in mobile telephony, Apple.
Nokia, in 2007, had shipped over 60 million smart phones. They have with their Symbian OS 67% of the market share in the world, followed by Microsoft with 13%, and RIM with 10%. Apple takes the 1st year 7% of market share. Apple’s entry into this market in 2007 with the iPhone sparked a lot of media attention and speculation about the extent to which it could disrupt companies such as Nokia, RIM, Palm and Motorola.
Nokia is a little over 100,000 employees in 2007, following the joint venture with Siemens that will become Nokia Siemens Networks which was officially launched during the 3GSM in Barcelona in February 2007. Later in 2014 Nokia Networks, which will acquire Alcatel-Lucent for a little more than 15.6 billion euros in 2015 to become, with Ericsson and Huawei, the giants of the infrastructure of mobile operators.
The paradox in 2021 is that Nokia is the world’s number three in fifth generation networks, 5G, but is still restructuring and could cut up to 11% of its workforce by 2023 to achieve 600 million euros in savings.
As the leader of the Nokia market, organize an annual Nokia World event which was the demonstration of its ecosystem of service, innovation and its vision for the future. It is also a way for Nokia to be in close contact with its partners, customers and also journalists. Over 2,000 people took advantage of numerous conferences over two days and allowed them to take the pulse of the company.
I had the chance to attend 5 years since 2006, it was intense and inspiring knowing that it was the marketing sting of Nokia very well organized with the Finnish rigor that we know them!
There were many announcements made around products and services, the giant’s teams demonstrated many innovations from R&D centers, concepts (such as the Kinetic tablet, below in video) which suggested that Nokia mastered its future, but showing an innovation does not mean that you have the technology wherever the technology exists. In 2007, Nokia employed 30,415 people in research and development, representing around 27% of the group’s total in 10 countries.
Let’s go back to a few dates during the 2007-2014 period. In one year, Nokia made a lot of announcements, takeovers, we are going to review a few which show that the giant was on many fronts at the same time. He was building a multi-channel ecosystem of distribution and content such as gaming and music. Nokia believed that it was resolutely focused on uses and user experiences.
As we have said, Apple has shaken up the mobile industry, Nokia has taken note of it, but not enough, at least like many players in the market like Microsoft, which with its CEO Steve Ballmer made this statement: “It’s the most expensive phone in the world, it doesn’t have a keypad which makes it a bad tool for emailing, the iPhone has ‘no chance’ of gaining significant market share”. His reaction may make you smile in 2021, but at the time his words were that of an industry captain who looked at the figures and who did not see the uses changing!
And remember that Apple subsidized the iPhone through operators, which was new at the time. This innovation in the business model has enabled many consumers to buy the iPhone which otherwise would have spent 600/700 euros on a smartphone. In France, it was sold € 399 with a package at € 49 per month, for example at Orange. Finally, when you are a world leader like Nokia with incredible figures, you do not expect to be the loser in a few years, in this case we are talking about 7 years which will be marked by the sale of its mobile terminals division in 2013.
- In June, Nokia announced that it would introduce a new corporate structure.
- In August, Nokia introduced Ovi, a new brand of Internet services which will include 2 services for purchasing music and games with Nokia Music Store and N-Gage.
- The main devices that made volume for 2007 included the Nokia N73, the N70 and the Nokia N95, one of the best smartphones of the brand, the flagship of Nokia with advantages that the iPhone did not have.
- On October 1, 2007, Nokia finalized the acquisition of NAVTEQ for approximately 5.7 billion euros which will be central in service strategy.
- In August 2015, Nokia sold Navteq and its mapping brand HERE to a consortium of 3 German car brands, Audi, BMW and Mercedes (Daimler Group) for 2.5 billion euros.
- This is the year Android 1.0 version was released, Nokia’s third quarter profit fell 30%, while sales fell 3.1%. On the other hand, iPhone sales have skyrocketed by around 330% during the same period. But it is still Nokia’s best sales year with more than 460 million mobile phones sold!
- Nokia released its first full-touch smartphone in 2008. Dubbed the 5800 Xpress Music, the device was also the first to run the Symbian touch-sensitive version S60. It had some success, as the company managed to sell around 8 million units at the end of 2009, but it failed to create the change because the touch experience was poor. The touch screen has haptic feedback!
- The brand presents a mobile nanotechnology concept developed by the Nokia Research Center and the University of Cambridge. This concept showed flexible materials, transparent electronic components and self-cleaning surfaces.
- In 2008, the N97 was launched and during the brand’s developer summit, development tools will be launched to bring the web to mobile.
In 2009, the brand did not weaken, but Nokia was struck by its challengers, it remained the world leader. Executives recognize a number of delays in the market, including on Touch and the Store launch, but he believes the playing field is big and as wide as its competition. They are also targeting the emerging BRIC countries (Brazil, Russia, India, China, which are the countries where he thinks the battle will be won). The brand will produce many currencies (a hundred) which support their new strategy by adapting to cultures.
- The launch of OVI Store, 1.5 million developers in the Nokia community will join the store.
- Launch of Nokia Money which will allow non-banking people to manage their money, among other things, and reduce cash transactions to emerging countries.
- A new OS was born which would migrate to touch, have a Hybrid OS between touch and keyboard, the Symbian S60 OS was to be an important transition period for the developer community, but quite chaotic and above all too late!
- Nokia offered its code (Symbian) to a foundation to migrate to an open source business model that would allow OS governance. Its mission was to build a community around the OS and thus manage the open source software platform based on Symbian OS. Below is the interview with Lee Williams who was in charge of this foundation during the Nokia developer summit in 2009.
In France, Nokia was not the leader, and with the iPhone has become one of the flagship countries for Apple. Below, the interview with DG Nokia France during Nokia world in 2009.
2010 – 2011
At a press event in London, Microsoft CEO Steve Ballmer and Nokia CEO Stephen Elop announced a partnership between their companies in which Windows Phone would become the primary smartphone operating system for Nokia, replacing Symbian. . The agreement also allowed for the integration of Bing as a search engine on Nokia devices and the integration of Nokia Maps into Microsoft’s own mapping services. There is also the integration of the Office 365 suite.
That year, the first Lumia smartphones appeared, including the Lumia 800.
At the same time, Nokia with Intel had also explored the use of Linux in mobile devices. The result, an operating system named MeeGo, which was intended to replace Symbian after several generations of products. But here too a fiasco, MeeGo will be replaced by Tizen in 2012. In the first half of 2015, the Nokia Store was closed. Microsoft has laid off tens of thousands of workers at manufacturing plants and research centers from Redmond to Finland to China.
The company’s financial losses totaled more than $ 10 billion in restructuring charges and write-downs. Windows Phone’s market share in the first quarter of 2016 was 0.7%. In 2016, the company, owner of the Nokia brand, chose to entrust its use for mobile telephony terminals to the Finnish company HMD Global, founded by former Nokia executives. It is the 15th largest smartphone brand in the fourth quarter of 2020 with 0.7% market share.
So do you have any idea why in a few years this giant has declined? (the study) The following and part of the answer in the podcast below:
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